To state that public saving is equal to investment, for a closed economy, is to state an accounting identity. This is a true statement.
An economy that is completely self-sufficient and that doesn't engage in foreign trade is referred to as a closed economy. Closed economies are practically nonexistent nowadays, however some nations are closer to having one than others.
Utilizing just domestic resources, the domestic economy satisfies all demands. Limit your exposure to exchange rate and global economic shocks. Through international commerce and capital flows, a financial crisis or recession spread. A closed economy is therefore not at risk from either because neither exist.
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